Corporate profits

Trump praises corporate profits while seeking corporate tax cuts


WASHINGTON (Reuters) – US President Donald Trump sent a Twitter message on Tuesday bragging about the high profits of US companies under his presidency, prompting critics to say he was undermining Republican arguments for a tax cut for companies.

As Republicans in Washington attempt to refocus on taxes after their failed campaign to repeal Obamacare, Trump sent out an early tweet that read: “Businesses have NEVER made as much money as they did. they are earning it now. “

Corporate lobbyists and Republicans consistently argue that a reduction in corporate income tax is needed to help businesses be more competitive. But highlighting corporate profits could diminish this argument.

“It’s a strange way to launch their proposal to cut corporate taxes,” Democratic Senator Brian Schatz said in a tweet from him in response to Trump.

America’s largest state-owned companies saw their profits accelerate in 2017, with quarterly profits rising at double-digit rates from a year ago, according to Thomson Reuters data. Annual profits are expected to increase by 11.5%, which would be the strongest growth since 2011.

More than six months into his presidency, Trump is still sending tweets that surprise aides and allies and sometimes clash with Republicans’ messages on their political agenda.

Trump’s tweet “removes the urgency of the call to reduce the burden on business,” said William Galston, senior researcher at the Brookings Institution think tank.

Trump then took credit for the surge in U.S. stock prices that pushed the Dow Jones Industrial Average to a new high on Tuesday.

STRONGER GAINS UNDER OBAMA

But the broader market saw a bigger rally under former President Barack Obama. The benchmark S&P 500 has gained 9.4% since Trump took office on Jan.20, after S&P gained 16.2% during Obama’s first months in office.

Republican Senate Leader Mitch McConnell said on Tuesday that Congress would address post-Labor Day tax reform in the United States on September 4, starting with the House of Representatives. A White House timeline contemplates a House vote on tax legislation in October and a Senate vote in November.

But there is little consensus on the issue. The White House insists on reducing the corporate rate to 15 percent, while House Republicans favor 20 percent. A senior Republican Senate official said this week lawmakers would be lucky to reduce it to 25%.

On Tuesday, Senate Democrats offered to work with Republicans on a bipartisan tax package, but only if it didn’t cut taxes for the rich, increase the federal deficit, or allow Republicans to enact themselves legislation.

But McConnell rejected the offer of 45 lawmakers led by Democratic Senate Leader Chuck Schumer.

“Most of the principles that would make the country grow again, they’re not interested in addressing them,” the Kentucky Republican told reporters.

McConnell said he hoped the Republican legislation could win the support of three Senate Democrats who are slated for re-election next year in the Republican states and has not joined in the offer of other Democrats.

Reporting by David Morgan; Additional reporting by Richard Cowan and Amanda Becker in Washington and Dan Burns in New York; Editing by Cynthia Osterman and Kevin Drawbaugh